home purchase

Smarter in 60 Credit Holds

Why freezing your spending during the mortgage process is a good thing.


When obtaining a mortgage, one of the most important things you can do is freeze your discretionary spending. This is because mortgage lenders consider your entire financial picture when deciding whether or not to approve your loan application. This includes your current income and debt-to-income ratio and your past spending habits.

If you’ve been spending freely and recklessly, it could be a red flag to lenders that you’re not responsible with your money, making them wary of approving your loan. By freezing your spending while obtaining a mortgage, you’re showing lenders that you’re serious about your finances and are committed to responsibly managing your money.

Additionally, freezing your spending while obtaining a mortgage can help you save up for a down payment. It can be tempting to splurge when you’re preparing to buy a house, but it's essential to focus on saving if you’re serious about obtaining a mortgage. By reducing your spending, you can use the money you save to make a larger down payment, which can help you lower your monthly payments and interest rate.

Freezing your spending while obtaining a mortgage can help you build your credit score. Your credit score is a significant factor in determining whether you’ll be approved for a loan, so it’s essential to ensure it’s as high as possible. By freezing your spending, you can ensure you don’t take on any additional debt that could damage your score.

Freezing your spending while obtaining a mortgage is a smart move that can help you demonstrate financial responsibility to lenders, save up for a down payment, and increase your credit score. By taking these steps, you’ll be better positioned to secure the loan you need.

Our Peoples mortgage lenders can guide you through questions you might have about discretionary spending during the mortgage process. You can apply online by selecting a lender or calling 888.929.9902 and asking to speak to a mortgage lender.

photo of Ericka EckardtEricka Eckardt
Mortgage Lender NMLS#1543851

Eckardt joined Peoples in 2023 with two years of experience as a mortgage lender, along with an additional eight and a half years of experience in retail banking. Eckardt is a Rhinelander native, and knows the Northwoods real estate market and home financing and will put that knowledge to work for you in purchasing your dream home.

715.420.2122 | ericka.eckardt@bankpeoples.com